Series 7 Exam Question 89: Answer and Explanation

Question: 89

Place the following in order from first to last regarding the opening of an option account.

I. The customer signs and returns the OAA

II. A ROP approves the account

III. The customer receives an ODD

IV. The first trade is executed

• A. III, II, IV, I
• B. II, III, I, IV
• C. IV, III, I, II
• D. I, II, IV, III

Correct Answer: A

Explanation:

A. Prior to opening an options account, all customers must receive an ODD (Options Disclosure Document or Options risk Disclosure Document). After that, an ROP (Registered Options Principal) would need to approve the account. At that point, the first options trade can be made. After the account has been approved, the customer has 15 days to sign and return the OAA (Options Account Agreement).